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Decide
if you're saving for public or private
college.
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Get the
current average annual cost of private versus public
school.
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Determine what college will cost when your child is
ready to attend.
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Set
up a timeline for saving:
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Determine how long you have before you need to shell
out cash for tuition.
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Figure
out how much you have already saved and how much you still
need to put away to meet that objective.
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If you
don't have one already, establish an investment philosophy and
determine a financial strategy that works for your
family.
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Consider hiring a professional financial
advisor.
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When
college is more than 15 years away:
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Consider opening an Education IRA.
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Consider setting up a custodial account for
minors.
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Think
about investing in aggressive mutual funds.
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When
college is ten to fifteen years away:
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Look
into prepaid tuition plans.
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Look
into state-sponsored college savings plans.
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Begin
to stabilize your financial portfolio.
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When
college is five to ten years away:
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Move a
portion of your investments into fixed income or
bonds.
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When
college is five years or less away:
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Move
your child's college money into more conservative
investments.
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When
it's college time--tax breaks:
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| |
Look
into the Hope Credit.
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| |
Look
into the Lifetime Learning Credit.
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 |
The
Hope Credit and The Lifetime Learning Credit are mutually
exclusive. Parents must choose one or the other for each
student; they both can't be claimed at the same
time.
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| |
See if
you qualify to take a tax deduction on the interest paid on
your child's student loan.
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| |
Consider withdrawing funds early from your traditional
or Roth IRA and taking a penalty waiver.
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When
it's college time--parent loan:
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| |
Look
into the federal Parent Loan for Undergraduate Students
(PLUS).
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When
it's college time--financial aid:
The main types of financial
aid are loans, grants and scholarships, and work/study
programs. The majority of financial aid comes through the U.S.
Department of Education—nearly 70 percent of all money
given—mostly in the form of loans. The rest comes from a
combination of federal or state grants and programs, from the
universities themselves, and from corporations, foundations,
professional and service organizations, and community groups.
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| |
Fill
out the Free Application for Federal Student Aid (FAFSA)
form.
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| |
ClubMom's checklist Helping Your High Schooler Find the
Right College has helpful financial aid
information.
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|
|
When
it's college time--student loans:
|
| |
If your
child qualifies for a Federal Stafford Loan (which gives
students a break on loan interest payments), factor this into
your financial planning.
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| |
If your
child qualifies for a Perkins Loan, factor this into your
financial planning.
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|
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|
When
it's college time--grants and
scholarships:
|
| |
If your
student qualifies for a Federal Pell Grant, factor this into
your financial planning.
|
| |
If your
student qualifies for a Federal Supplemental Educational
Opportunity Grant (FSEOG), factor this into your financial
planning.
|
| |
Look
into the Leveraging Education Assistance Partnership (LEAP)
program.
|
| |
Find
out about money available directly from the college and
universities to which your child is applying.
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| |
Find
out about special interest groups and organizations that
supply cash for college.
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| |
Beware
of scholarship search firms that promise you scholarship money
for a fee.
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Work/study programs:
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| |
If your
child qualifies for a work/study program, factor this into
your financial planning.
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Alternative approaches to financial
aid:
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| |
Consider reducing the cost of college by having your
child start out at a community college.
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| |
Consider having your child apply for a four-year U.S.
Army ROTC scholarship.
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